House votes to curb energy market speculators

WASHINGTON The House of Representatives on
Thursday overwhelmingly approved legislation that directs the
Commodity Futures Trading Commission to use all its authority,
including the agency's emergency powers, to "curb immediately"
the role of excessive speculation in energy futures markets.

Hedge funds, pension funds and other speculators have been
blamed by many lawmakers and some energy experts for doubling
the price for crude oil in the last year. The Bush
administration disagrees, saying high prices are the result of
world oil production not being able to keep up with growing
global fuel demand.

The bill easily cleared the House in a 402-to-19 vote. The
Senate must still take up the measure.

The legislation, sponsored by Rep. Collin Peterson of
Minnesota, the chairman of the House Agriculture Committee,
would require the CFTC to act against "sudden or unreasonable
fluctuations" in energy futures prices and other trading
activities that "prevent the market from accurately reflecting
the forces of supply and demand for energy commodities."

"It opens up a set of new tools they are not using," said
Maryland Democratic Rep. Chris Van Hollen, referring to the
agency's emergency powers.

"The American people should not be punished at the pump for
the actions of oil speculators," said House Speaker Nancy
Pelosi.

CFTC chairman Walter Lukken testified to Congress this week
that speculators are needed in the futures markets and they are
not to blame for record oil and gasoline prices.

Nonetheless, in response to high energy costs, the CFTC has
ordered that more information on energy trading be reported to
the agency and is investigating possible market manipulation of
oil prices.

But Virginia Republican Bob Goodlatte said while he will
support the bill, Congress needs to work harder to increase the
supply of oil and natural gas by allowing more drilling
offshore and elsewhere.

"I find it appalling we are not doing the job that needs to
be done," he said on the house floor.

Added Republican Rep. Dan Burton of Indiana: "It's time we
start drilling here in the United States. The minute we do that
the price will drop,"

About a dozen bills are pending in the Congress to rein in
energy speculators.

Earlier this week, Democratic Sen. Byron Dorgan of North
Dakota introduced legislation that would increase the money, or
margin, that speculators would have to put up to trade oil
futures at the New York Mercantile Exchange NMX.N to 25
percent of the value of the underlying commodity. Currently,
the margin on oil futures is about 7 percent.